REG-Global Ports Holding PLC 3rd Quarter Results
11/12/2019 07:30
============
Global Ports Holding PLC (GPH)
3rd Quarter Results
11-Dec-2019 / 07:25 GMT/BST
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR), transmitted by
EQS Group.
The issuer is solely responsible for the content of this announcement.
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Global Ports Holding Plc
9 Month 2019 Trading Statement
Global Ports Holding announces record 9 month results, full year
expectations lowered
Global Ports Holding Plc ("GPH" or the "Group"), the world's largest
independent cruise port operator, today announces its unaudited results
for the nine months ending 30 September 2019.
Key Financials & KPI 9M 2019 9m 2019 9m 2018 YoY Q3 2019 Q3 YoY
Highlights Change 2018 Change
CCY5
Passengers (m PAX)6 3.7 3.3 11.1% 1.6 1.7 -4.2%
General & Bulk Cargo 580 -50.2% 122 371 -67.1%
('000 tons) 1,166
Container Throughput 155 182 -14.8% 50 59 -15.2%
('000 TEU)
Total Revenue ($m)1 91.5 93.7 94.5 -3.1% 36.9 37.9 -2.7%
Segmental EBITDA 66.3 68.1 70.5 -6.0% 27.2 30.2 -10.0%
($m)2
Segmental EBITDA 72.4% 72.7% 74.6% 73.7% 79.6%
Margin
Cruise Revenue 46.1 47.9 41.4 11.2% 22.2 19.1 16.5%
($m)7
Cruise EBITDA 32.6 34.3 28.6 13.9% 15.7 13.9 12.9%
($m)8
Cruise Margin 70.6% 71.6% 69.0% 70.8% 73.1%
Commercial 45.4 45.8 53.0 -14.4% 14.7 18.9 -22.2%
Revenue ($m)
Commercial EBITDA 33.7 33.8 41.9 -19.5% 11.4 16.3 -29.6%
($m)
Commercial Margin 74.2% 73.9% 78.9% 78.0% 86.2%
Adjusted EBITDA ($m)3 61.0 62.8 65.3 -6.6% 26.2 29.3 -10.4%
Adjusted EBITDA 66.7% 67.1% 69.1% 71.0% 77.1%
Margin
Operating Profit ($m) 10.3 21.0 -51% 8.8 14.5 -39.3%
Profit/(Loss) for the (14.8) (0.1) n/a 1.0 3.5 -71.4%
period ($m)
Underlying profit for 10.4 24.1 -56.8% 9.5 11.1 -14.4%
the period4
9M 2019 Dec 2018
Net Debt 332.5 -
Net Debt ex impact of 272.9 267.2
IFRS 16
Key Financials and KPIs
• Total consolidated revenues were $91.5m for the 9M period, down 3.1%
yoy (-0.9% ccy)
◦ Q3 revenues were down 2.7% yoy at $36.9m (-1.9% ccy)
• Segmental EBITDA for the 9M period down 6.0% at $66.3m (-3.3% ccy)
◦ Q3 Segmental EBITDA down 10% at $27.2m (-7.9% ccy)
◦ Q3 Cruise EBITDA up 12.9% (17.4% ccy), Q3 Commercial EBITDA down
29.6% (-29.6% ccy)
• Adjusted EBITDA of $61.0m for the 9M period down 6.6% (-3.8% ccy)
◦ Q3 Adjusted EBITDA down -10.4% at $26.2m (-8.2% ccy)
• Cruise passenger volume growth for the 9M period +11.1%
• Container Throughput ('000 TEU) -14.8% and General & Bulk Cargo -50.2%
for 9M period
Emre Sayin, Chief Executive Officer said;
"I am pleased with the performance of our Cruise business, which once
again has delivered record results in line with our expectations. The
recent start of cruise port operations in both the Bahamas and Antigua
represents a transformational and exciting moment for the Group. The
addition of these ports means that Cruise will become our largest
business, firmly delivering on the plans we set out at the time of the
IPO. Trading at our Commercial business remained challenging in Q3.
Trading since the period end at our Cruise business has continued to be in
line with our expectations, while trading at our commercial business has
continued to be weak. As a result of the challenges facing the Commercial
business, we now expect the Group to deliver for the full year a decline
in Consolidated EBITDA in percentage terms of mid- single digit against
2018."
Financial Review
• Operating profit of $10.3m for the first 9 months of the year (9M
2018: $21.0m), was primarily due to $23.6m of amortisation expense in
relation to port operation rights (9M 2018 $24.1m), depreciation costs
in relation to right of use assets of $1.7m (9M 2018: $0.0m),
amortisation $9.6m (9M 2018: $9.6m) and one off adjustments $11.4m,
the majority of which were project expenses of $6.5m (9M 2018: $7.0m).
The total IFRS 16 impact on operating profit is $0.3m.
• Loss after tax for the period was $14.8 million (9M 2018: -$0.1m),
driven by an increase in net finance costs to $26.9m (9M 2018:
$22.0m), offset by an increase in income from equity accounted
associates to $4.4m (9M 2018: $3.7m), while tax expense decreased to
$2.6m (9M 2018: $2.7m). The increased net finance costs are primarily
due to $2.2m of IFRS 16 leasing interest (9M 2018: $0m), while net
interest expenses increased to $19.5m (H1 2018: $18.1m).
• Underlying profit for the 9-month period of $10.4m (9M 2018: $24.1m)
reflects the loss after tax in the period of $14.8m after adding back
amortisation of port operating rights of $23.6m (9M 2018: $24.1m) and
depreciation of right of use assets of $1.7m (8m 2018: $0m).
Cruise Port Review
Passengers ('000 9M YoY YoY
PAX) 9M 2019 2018 Change Q3 2019 Q3 2018 Change
(%) (%)
Creuers 1.9 1.9 2% 0.84 2%
0.86
Valletta 0.7 0.5 41% 0.32 0.23 43%
Ege Port 0.2 0.16 25% 0.12 0.10 26%
Other Cruise Ports 0.8 0.7 11% 0.29 0.49 -41%
Total Cruise Ports 3.3 11% -4%
3.6 1.59 1.66
• Cruise Revenue and EBITDA for the 9 months were up 11.2% and 13.9%
respectively, to $46.1m and $32.6m (15.6% and 13.7% ccy)
• Passenger volumes for the 9 months rose 11% yoy, with Q3 volumes
falling by 4%
◦ Q3 passenger volumes were negatively impacted by the US
authorities' decision to prohibit authorised travel to Cuba via
cruise ships under the People to People program
• Q3 Cruise Revenue and EBITDA rose by 16.5% and 12.9%, to $22.2m
and $15.7m respectively (18.0% and 17.4% ccy)
• Cruise EBITDA growth over the period was broad based, with notably
strong performances from Valletta, Ege and equity associate ports in
particular.
◦ Excluding the impact of IFRS 16, Cruise EBITDA growth for the 9 months
was 9.1% (15.1% ccy)
• 2019 has been a year of significant success in relation to our new
port strategy. We signed concession agreements for cruise ports in the
Bahamas and Antigua and have now started operating these ports.
◦ The addition of these ports to our portfolio, marks a truly
transformational moment for the company, GPH's Caribbean
operations will soon be delivering as much EBITDA as its
Mediterranean operations did in 2018.
• In addition, we continue to work on a number of other projects,
including potential extensions to a number of our current cruise port
concessions. La Goulette, Tunisia is expected to close before the end
of the year and we will shortly announce to the industry the winning
bidders for our recent travel retail RFP process. While our work to
extend our Port Services revenues continues to progress well. We look
forward to sharing more on these developments when it is appropriate
to do so.
Commercial Port Review
9M 2019 9M 2018 Yoy Chge Q3 2019 Q3 2018 Yoy Chge
Port Akdeniz
General & Bulk 445 1,026 -57% 109 331 -67%
Cargo ('000)
Throughput ('000 119 144 -17% 40 46 -14%
TEU)
Port Adria
General & Bulk 136 140 -3.3% 13.0 40.2 -68%
Cargo ('000)
Throughput ('000 36 38 -6.2% 10.1 12.8 -21%
TEU)
Total General & 580 1,166 -50% 122 371 -67%
Bulk Cargo ('000)
Total Throughput 155 182 -15% 50 59 -15%
('000 TEU)
• Macro-economic factors such as trade tariffs and barriers continue to
negatively impact the Commercial business.
• Throughput Container volumes fell 14.8% and General & Bulk Cargo
volumes for the 9 months were -50.2%
◦ In Q3 General & Bulk Cargo Volumes were -67.1% and TEU Throughout
was -15.2% yoy
• The Q3 decline in throughput container volumes reflects the continued
subdued marble volumes at Port Akdeniz, with Q3 marble volumes
declining by 13.5% yoy, albeit this was an improvement on the-22.1%
decline delivered in H1 2019.
• Commercial Revenue and EBITDA for the 9 months were down 14.4% and
19.5% respectively, to $45.4m and $33.7m (-13.7% and 19.2% ccy)
◦ Q3 Commercial Revenue and EBITDA fell 22.2% and 29.6%
respectively, to $14.7m and $11.4m, with the sharper decline vs
H1 driven by the impact of reduced oil services project work in
the period.
◦ Excluding the impact of IFRS 16, Commercial EBITDA growth for the
9 months was -20.5% (-20.2% ccy)
• Despite the sharp declines in volumes, EBITDA margins remained strong
at 74.2% for the 9 months, reflecting the inherent cost flexibility in
our business model.
• Excluding the one off positive impact of project cargo in 9m 2018,
Port of Adria's EBITDA grew by over 25% in the first nine months of
2019, driven by continued strong growth in steel coils volumes.
Balance Sheet
As at 30th September 2019 pre-IFRS 16 net debt was $272.9m compared to
$267.2m at the end of 2018 and $250.3m at the end of same period last
year. Post IFRS 16 net debt at the end of the period was $332.5m. Net
Debt/EBITDA pre-IFRS 16 was 3.4x (FY 2018 3.0x, 9M 2018: 3.2x,), including
the impact of IFRS 16, Net Debt/EBITDA was 4.2x. Gross Debt was $351.6m at
20 September 2019 (FY 2018: $347.1m). The leverage ratio as per GPH's
Eurobond rose to 4.4x (FY 2018: 4.0x) against a restrictive covenant
requirement of 5.0x, primarily driven by the reduced profitability at our
commercial ports and interest accruals related to our Eurobond.
Net cash inflows of $1.2m for the nine-month period, was driven primarily
by operating cash inflows of $42.6m after working capital of -$2.3m, other
movements totalling $16.1m which is primarily made up of equity accounted
associates -$4.4m and project expenses of -$6.5m. Net interest expense of
-$13.9m, tax of -$5.5m, capital expenditure of -$5.9m and dividends
-$19.4m.
Q3 working capital of $22.1m is primarily driven by the $18.2m reversal of
a number of H1 2019 working capital out flows, as discussed at the
interims, $12m from the early repayment of the Dreamlines loan, partially
offset by -$3.3m of new port related bid bond expenditure.
Strategic review
During Q3 2019 we announced that in light of the emerging opportunities in
our cruise business that we were undertaking a strategic review of the
Group. The process is currently expected to conclude in Q1 2020, however
there can be no certainty as to the final outcome. A further announcement
will be made when it is appropriate to do so.
Outlook & current trading
Overall the trends highlighted at the interim results have continued into
Q3. Our Cruise business continues to perform well in Q4 2019 and looking
into 2020 and 2021, organic growth is expected to be strong driven by a
significant increase in passengers at both Ege and Bodrum. The recent
addition of Nassau and Antigua cruise ports to our cruise portfolio is a
truly transformational for the group. Cruise passenger volumes for 2020
will increase by close to 100% and we expect to deliver in excess of $85m
of EBITDA from our Cruise business by 2022, a growth rate of in excess of
100% from 2018 levels.
As expected, macro-economic factors such as trade tariffs continued to
negatively impact our Commercial business in Q3, particularly Port
Akdeniz. Throughput container volumes were once again weak in the period
and this sustained weakness has continued into Q4. Longer term an
agreement to end the current escalation of trade tariffs involving China
and a general improvement in Chinese GDP are, we believe, the most likely
catalysts for a meaningful improvement in container throughput volumes.
As a result of the weakness in our Commercial ports, we now expect the
Group to deliver for the full year a decline in Consolidated EBITDA in
percentage terms of mid-single digit against 2018.
Conference call
A conference call for investors will be held at 9.30pm today. Please email
1 investor@globalportsholding.com for details
Notes
1. All $ refers to United States Dollar unless otherwise stated
2. Segmental EBITDA is calculated as income/(loss) before tax after
adding back: interest; depreciation; amortisation; unallocated expenses;
and specific adjusting items
3. Adjusted EBITDA calculated as Segmental EBITDA less unallocated
(holding company) expenses
4. Underlying Profit is calculated as profit / (loss) for the year
after adding back: amortization expense in relation to Port Operation
Rights and the one-off expenses related to the IPO and deduction of
reversal of replacement provisions
5. Performance at constant currency is calculated by translating
foreign currency earnings from our consolidated cruise ports, management
agreements and associated ports for the current period into $ at the
average exchange rates used over the same period in the prior year.
6. Passenger numbers refer to consolidated and managed portfolio
consolidation perimeter, hence it excludes equity accounted associate
ports Venice, Lisbon and Singapore
7. Revenue allocated to the Cruise segment is the sum of revenues of
consolidated and managed portfolio
8. EBITDA allocated to the Cruise segment is the sum of EBITDA of
consolidated cruise ports and pro-rata Net Profit of equity accounted
associate ports Venice, Lisbon and Singapore and the contribution from the
Havana management agreement
Notes to Editors
GPH is the world's largest cruise port operator with an established
presence in the Mediterranean, Caribbean, Atlantic and Asia-Pacific
regions. GPH was established in 2004 as an international port operator
with a diversified portfolio of cruise and commercial ports. As an
independent cruise port operator, the group holds a unique position in the
cruise port landscape, positioning itself as the world's leading cruise
port brand, with an integrated platform of cruise ports serving cruise
liners, ferries, yachts and mega-yachts. As the world's sole cruise ports
consolidator, GPH's portfolio consists of investments in q7 cruise ports
and two commercial ports in 11 countries and continues to grow steadily.
GPH provides services for more than 7.0 million passengers.
Appendix
Consolidated statement of comprehensive income data 9M 2019 9M 2018
Revenue 91.5 94.5
Operating Expenses (61.6) (57.3)
Depreciation and Amortization (34.9) (33.6)
Other Operating Income 3.0 6.9
Other Operating Expense (22.6) (23.1)
Operating profit 10.3 21.0
Finance Income 5.6 31.0
Finance Expenses (32.5) (53.0)
Profit before income tax (12.3) 2.6
Income tax expense (2.6) (2.7)
Profit for the period (14.8) (0.1)
Other financial data (USD millions actual)
EBITDA 61.0 65.3
EBITDA margin 66.7% 69.1%
9M 2019 9M 2018 Q3 2019 H1 2019
Cash flow (USD Million)
Adjusted EBITDA 61.0 65.3 26.2 34.8
Working Capital (2.3) (2.5) 22.1 (24.4)
Other (16.1) (9.9) (7.5) (8.6)
Operating Cash flow 42.6 52.9 40.8 1.8
Net interest expense (13.9) (9.3) (1.5) (12.4)
Tax (5.5) (2.8) (2.4) (3.1)
Net Capital Expenditure (5.9) (8.8) (0.1) (5.8)
Free cash flow 17.3 32.0 36.8 (19.5)
Investments -- (11.9) -- --
Exceptionals 3.3 0.9 (0.3) 3.6
Dividends (19.4) (19.7) (21.7) 2.3
Other (0.0) (0.1) -- --
Net Cash flow 1.2 1.1 14.8 (13.6)
Net Debt start of period 267.2 227.5
Net Cash flow 1.2 1.1
FX (6.9) (23.9)
Net Debt End of Period 272.9 250.3
IFRS 16 Impact 59.6 n/a
Net Debt End of period - Post IFRS 16 332.5 n/a
Consolidated statement of financial position data ($m) 9M 2019 9M 2018
Cash and cash equivalents (including short term 78.6 111.7
investments)
Total current assets 117.2 138.3
Total assets 698.7 726.5
Total debt (including obligations under financing leases) 411.1 362.0
Net debt (including obligations under financing leases) 332.5 250.3
Total equity 171.2 226.2
of which retained earnings 92.2 125.4
CONTACT
For investor and analyst enquiries: For media enquiries:
Global Ports Holding, Investor Relations Brunswick Group LLP
Martin Brown, Investor Relations Director Azadeh Varzi and Imran Jina
Telephone: +44 (0) 7947 163 687 Telephone: +44 (0) 20 7404 5959
Email:
2 martinb@globalportsholding.com Email: 3 GPH@brunswickgroup.com
══════════════════════════════════════════════════════════════════════════
ISIN: GB00BD2ZT390
Category Code: QRT
TIDM: GPH
Sequence No.: 34707
EQS News ID: 933215
End of Announcement EQS News Service
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References
Visible links
1. mailto:investor@globalportsholding.com
2. mailto:martinb@globalportsholding.com
3. mailto:GPH@brunswickgroup.com
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